Poa Mock Paper 1
Answer All Questions
Question 1
A trader decided to open a Provision for Doubtful Debts Account in 2007. Provision was to be provided at 5% of debtors outstanding at each year end.
$ $ Debtors balance at 31 Dec 2008 10 900 Debtors balance at 31 Dec 2009 10 500 Debtors balance at 31 Dec 2010 10 000
The following information has to be taken into account when preparing the provision for doubtful account. 1 The provision account has a balance of $600 on 1 January 2008. 2 A cheque of $200 received for a debt written off in year 2007 has not been taken into account and bad debt of $500 has to be written off in 2008. 3 A debtor account has been overdue and an interest of $80 has to be charged into his account in 2009. 4 A debit note of $60 issued for an invoice undercharged has been wrongly recorded as credit note received in the books in 2010.
REQUIRED
(a) Provision for Doubtful Debts Account for the three accounting years 2008, 2009 and 2010. [ 8 marks]
Provision for Doubtful Debts | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (b) State the account to be debited and the account to be credited for the following transactions. [2 marks] | Transaction | Account to be | | | Debited | Credited | 1 | Debit note issued for invoice undercharged. | | | 2 | Correction for debit note issued but wrongly recorded as credit note received in the books. | | |
[Total: 10]
Question 2
The following is the cash book summary (bank columns only) for Bass for the month of Jul 2011. | | $ | | Cheque No. | $ | Jul 1 | Balance | 6500 | Jul 3 Drawings | 10224 | 108 | 5 | Cash | 200 | 11 Jenny | 10225 | 526
Question 1
A trader decided to open a Provision for Doubtful Debts Account in 2007. Provision was to be provided at 5% of debtors outstanding at each year end.
$ $ Debtors balance at 31 Dec 2008 10 900 Debtors balance at 31 Dec 2009 10 500 Debtors balance at 31 Dec 2010 10 000
The following information has to be taken into account when preparing the provision for doubtful account. 1 The provision account has a balance of $600 on 1 January 2008. 2 A cheque of $200 received for a debt written off in year 2007 has not been taken into account and bad debt of $500 has to be written off in 2008. 3 A debtor account has been overdue and an interest of $80 has to be charged into his account in 2009. 4 A debit note of $60 issued for an invoice undercharged has been wrongly recorded as credit note received in the books in 2010.
REQUIRED
(a) Provision for Doubtful Debts Account for the three accounting years 2008, 2009 and 2010. [ 8 marks]
Provision for Doubtful Debts | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (b) State the account to be debited and the account to be credited for the following transactions. [2 marks] | Transaction | Account to be | | | Debited | Credited | 1 | Debit note issued for invoice undercharged. | | | 2 | Correction for debit note issued but wrongly recorded as credit note received in the books. | | |
[Total: 10]
Question 2
The following is the cash book summary (bank columns only) for Bass for the month of Jul 2011. | | $ | | Cheque No. | $ | Jul 1 | Balance | 6500 | Jul 3 Drawings | 10224 | 108 | 5 | Cash | 200 | 11 Jenny | 10225 | 526